Is the cloud the new Y2K? The reasons why (and why not)

Commentary - Twelve years ago, the year 2000 (Y2K) was portrayed as IT’s Grim Reaper – engineers and developers labored day-and-night to modernize legacy applications and bring new systems online to avoid the predicted shutdown of major business applications and an ensuing global blackout. The build-up to Y2K was terrifying and wide-ranging, with ramifications far beyond the tech sector as the ordinary public became heavily invested in the outcome to an almost hysterical level.

Commentary - Twelve years ago, the year 2000 (Y2K) was portrayed as IT’s Grim Reaper – engineers and developers labored day-and-night to modernize legacy applications and bring new systems online to avoid the predicted shutdown of major business applications and an ensuing global blackout. The build-up to Y2K was terrifying and wide-ranging, with ramifications far beyond the tech sector as the ordinary public became heavily invested in the outcome to an almost hysterical level.

In the end, Y2K fizzled – there was no global blackout or prelude to some digital apocalypse. Perhaps the most important aspect of Y2K was not the hysteria that surrounded it, but the fact that it put information technology center stage in the minds of everyone from young to old, blue collar to white collar and forced CIOs and IT decision makers to examine their ENTIRE IT ecosystems, redacting or updating legacy systems to survive in the new millennium.

Now, the cloud is emerging as a worthy successor to the Y2K fervor. While “Cloud2K” does not have the hysteria around a potential IT-fueled Armageddon, it does have the same level of hype that Y2K enjoyed, including wide awareness within the general public, and shares one other trait with Y2K:

It’s likely to fizzle out with a whimper, not a bang.

Now, before everyone reading scoffs – the cloud will find success; there’s no doubt about that. But will the cloud live up to its lofty expectations? Can it meet the extreme promises of vendors and analysts?

If the current approach to the cloud remains, then the answer is no. From business leaders to IT decision makers, the cloud is being hailed as a cure-all for everything from infrastructure costs to applications, but the “silver bullet” moniker just isn’t appropriate. In fact, until proven otherwise, the cloud has more in common with Y2K’s fizzle than an IT panacea.

But why exactly is the cloud failing to meet expectations?

SaaS – Square Pegs, Round Holes
Software-as-a-Service (SaaS), the most successful of the three primary cloud offerings, provides ready-to-use application software with a single credit card. SaaS gives businesses an opportunity to get applications up and running immediately without any support from IT, effectively providing a path to avoid IT altogether.

The benefits of a SaaS application, however, dwindle rapidly over time. While it may be a perfect fit for the business now, the vast majority of these solutions are highly inflexible when it comes to adapting to changing business needs. The end result is that the business is stuck with an application that only meets a handful of requirements; confirming that the problem was a ‘round hole’ and the SaaS application was ‘square peg.’

SaaS costs compound this issue, with prices soaring as more users and features are brought on-line. Extending or customizing a SaaS application leads back to IT, causing slower response times and increasing expenditure. Replacing SaaS is something of a final nightmare, as a company struggles with how exactly to get data out of the cloud.

SaaS is perfect for truly commodity applications, but gets into trouble with business-specific processes that require custom tooling or functionality. Businesses should look at it as packaged software…only without the packaging.

IaaS – Hardware isn’t a cost saver
Beyond SaaS, infrastructure-as-a-service (IaaS) is rapidly becoming a mature cloud capability, promising a public cloud solution that hosts a company’s entire IT backbone in an on-demand environment as opposed to in-house. Hardware, however, is not the lion’s share of cost for most enterprises, which relegates IaaS to some niche solutions for certain IT profiles, most notably small to mid-size companies, where its value levels the playing field when competing against larger entities.

For more established companies with significant infrastructure, IaaS offers a niche solution to swiftly deploy new servers, allowing product teams to kick-start new projects in the cloud until their own datacenter is ready. Additionally, IaaS can be packaged as a private cloud, turning an organization’s existing investment in infrastructure into an elastic utility, squeezing more value out of existing technology.

Beyond these two scenarios, IaaS just is not a cost saver, as real infrastructure costs come in the form of software licenses, and the people needed to build, deploy and maintain business applications, cloud or not.

PaaS – Great…if the business can change
Platform-as-a-service (PaaS) is the newest cloud offering and the least mature and well defined. Essentially PaaS offers enterprises the best of IaaS (fast starts and elasticity) with the tooling needed to deliver custom applications. The problem with PaaS, however, starts with the definition – what exactly makes up an effective PaaS solution?

The three keys of PaaS are essentially:

An application development framework to simplify migration and support the creation of new business software, along with full testing, deployment and change management capabilities.

A suite of application management services, from portfolio management to application failover, providing a dashboard view with “knobs” to adjust how the PaaS behaves.

However, vendor lock-in is a serious problem with PaaS. With flexibility being a key need for almost every business, a solution that only churns out proprietary code, uses proprietary data structures or requires a specific runtime engine can stifle, if not altogether halt, developer productivity, making PaaS more of a bane than a boon.

Additionally, while IT executives love the idea of PaaS, it often fails the “sniff test” for the IT team at-large because of one issue: Change, or rather the change required to implement PaaS. Successful PaaS necessitates an “out with the old and in with the new” mentality, requiring IT shops to discard old processes to make room for the newer, streamlined methods of the PaaS solution.

Cloud2K: Realistic boom or spectacular bust?
The cloud doesn’t have to follow in the same steps as Y2K, going down as an enterprise IT event that completely failed to live up its high-profile billing. But in order for the cloud to start meeting the hype, it’s the enterprise rather than the technology that has to start making moves.

For starters, enterprises need to understand the realities of the cloud flavors:

SaaS is a niche play for commodity applications, not business critical or differentiating applications and systems. Otherwise, speed to delivery is minimized and costs become prohibitive.

IaaS is worth it, but not from a cost reduction standpoint – CIOs need to look past the perceived cost savings (which are typically immaterial) and examine how IaaS can make their operations more efficient.

PaaS can live up to its lofty expectations, but only if the entire IT department buys in. It’s change for the better, but in the view of IT “any change is bad change.” CIOs need to buckle down on their teams to change this perspective, or PaaS is dead in the water.

Just like Y2K’s, the cloud’s potential impact on the business world is massive. But as Y2K proved, some of the real value will come from forcing IT decision makers to examine their ENTIRE IT ecosystem with the end result being a much more efficient, fast changing IT capability.

So act now. There was a global sigh of relief when Y2K did not live up to its hype and the opportunity is at hand to evoke the same sense of relief when the cloud fulfills its potential.

biographyMike Jones is vice president of Global Marketing/Agile Evangelist, OutSystems.